Thursday, 30 August 2012

Back in the day,
baseball teams would pay huge amounts for superstars with excellent
performance statistics, such as batting averages. (Baseball involves
batting, right? Bear with me, this will become a metaphor.) One
now famous baseball coach started out as an econometrician. He
analysed team performances, looking for players who were on
successful teams even though their individual statistics were not
that great. The logic was that teams, not individuals, win matches.
Buying these relatively cheap players, he took them to the top of the
Superbowl (or whatever - I think this book has the details).

Chicken farmers have
discovered the same thing. If you only breed from the individuals who
lay the most eggs within a coop,
you end up selecting for highly aggressive hens who destroy each
others’ eggs. It’s better to breed from individuals within highly
productive coops. (Source.)

The UK's Research Excellence
Framework is approaching. It ranks academic departments by aggregating each individual's productivity. This is fair enough. The problem starts when departments try to increase their ranking by trying to hire academic "superstars". If this were what made a great department, we
could all just work from home. Departments should be places where
ideas cross-fertilize. The person who contributes to a vibrant
working environment, or frames someone else’s idea in an important
new perspective, may be as important as the person with a
Stakhanovite publication output.

So, in terms of incentive structures, academics are some way behind sports coaches and chicken
farmers. I hope they will soon catch up with these more
forward-thinking elements of society.

Tuesday, 28 August 2012

GSSD-Kaserne lies in the forest on the hills above Lichtenhain. Originally it was a location for Scud rockets. Parts of the base have become a nature reserve, with barracks buildings now housing bat colonies. Before that, it was visited by graffiti artists, newly liberated from the grip of the Red Army.

In a democracy, so the saying goes, the people get the government they deserve. Part of Obama’s genius is a remarkable ability to soothe race consciousness among whites. Any black person who’s worked in the professional world is well acquainted with this trick. But never has it been practiced at such a high level, and never have its limits been so obviously exposed.

A side note: sometimes people try to reconcile central bank independence with democracy, by arguing that monetary policy is a purely technical field without distributive consequences. If inflation does become a tool of policy, then this will swiftly be seen for the nonsense it always was. Inflation redistributes towards debtors. It's just as political as everything else.

Sunday, 19 August 2012

Having experienced both, I think Virgin are great and FGW are dreadful.

Designing a market for train services is tricky. Leaving each rail operator permanently in charge might lead to stagnation. Reshuffling franchises every few years puts civil servants in charge of the market, and can make the operators short-termist. My instinct is to prefer natural monopolies to artificial competition (have I mentioned the Russian chandelier factory?) but that is just from the gut.

I travelled across Germany on Friday. Every train I used was late, I was delayed by 2 hours in total, and there was a replacement bus service on the last part of the line.